The Future Is Small
Naval: I really firmly believe that the actual efficient size of a company is shrinking very rapidly. The future will be almost all startups. Most of the world and most business will adopt the startup mentality — small companies loosely connected and coupled to each other through APIs.
The Industrial Revolution created massive clustering — economies of scale from factories meant everybody ganged together in 5,000 or 10,000-person companies. I think that trend has now reversed thanks to information technology.
The efficient size of a company is shrinking. The future will be almost all startups.
We're All Uber Drivers
Naval: Your son or daughter will wake up in the morning with a couple of job offers on their phone. They'll pick the one they want, do it for 2 or 3 days through APIs and interfaces, then get rated and get feedback.
In the future we're all Uber drivers — or delivering food or doing contract work. The contract work trend is going to increase. The size of your average company is going to decrease.
In the future we're all Uber drivers. Contract work increases. Company size decreases.
Billion-Dollar Companies, Four People
Naval: I think we're going to see more billion-dollar businesses built by four or five people. The VC industry doesn't believe this — they still think you need a couple hundred million dollars to scale a company. I don't think that's true.
You'll be able to outsource your sales, revenue collection, bookkeeping, early-stage hiring. There'll be lots of small companies, loosely coupled. Any entrepreneur worth their salt could build Facebook today with a few hundred people.
More billion-dollar businesses built by four or five people. The VC industry doesn't believe it.